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The benefits of best-of-breed CRM

With SAP making headway into the CRM market and Oracle gobbling up everything in sight, what are the advantages to sticking with the smaller CRM vendors?

With SAP making headway into the CRM market and Oracle gobbling up everything in sight; it seems that there may be an enterprise CRM migration away from best-of-breed vendors toward the big-boys that offer complete suites. What are the advantages to sticking with the smaller vendors, and what sort of niches do they fill?

First, let me start by saying that in spite of all of the consolidation and hype going on at the "high" end of the CRM solution marketplace, I still don't see offerings from SAP or Oracle/Siebel/PeopleSoft as viable solutions for most small and mid-sized businesses (SMBs). Even though the "big two" CRM vendors (SAP and Oracle) are now offering hosted/on-demand solutions, these vendors are still best suited for the Fortune 1000 and only the largest of the mid-market enterprises.

SAP's new hosted CRM service is really a strategically defensive offering primarily targeted to its existing on-premise ERP customers. SAP needed to offer some form of on-demand CRM in order to keep some of their existing customers (who are looking for an on-demand type of CRM technology solution) from going to salesforce.com or the other on-demand CRM upstarts in order to meet those needs.

What's more, the following quote from Tony Martinez, vice president of SAP global CRM business strategy is an indication that going with SAP's hosted sales force automation solution may result in more then what was bargained for: "The product is still being rolled out and a lot of initial integration work is going to have a consultant involved."

As far as Oracle goes, so far it's leaving Siebel's CRM OnDemand offering as is; but again, who knows what they'll do longer term. They may very well end up offering a hybrid on-demand and on-premise solution like SAP.

By the way, to be quite frank I believe that the jury is still very much out on whether companies that have always sold on-premise software, like SAP, Oracle and Microsoft really understand and are committed to the on-demand CRM model.

To answer the second part of your question, yes, I do believe that there are a number of advantages to SMBs who stick with the vendors who are focused on the small and mid-sized marketplace; don't fear, there's plenty to pick from.

In CRM Mastery's on-line CRM Solution Directory we have listings for more then 200 CRM suite vendors but, the major players focused on the SMB marketplace who are offering on-demand solutions include salesforce.com, Netsuite, Entellium, RightNow Technologies and SageCRM while the on-premise vendors include Microsoft, Maximizer, Surado, Sage-Saleslogix, Onyx and Pivotal.

The advantages of sticking with vendors who are dedicated to the SMB marketplace are that:

  • They offer comprehensive CRM solutions that are priced right for the SMB marketplace; (i.e. they don't just offer stripped-down "lite" versions of their solutions to SMBs);
  • Many of these vendors have spent years building a value-added reseller channel so that you can get local implementation assistance and support; and
  • Most importantly, these vendors have built CRM solutions that been designed from the ground up to be easy to use, quick to implement, easy to customize and to integrate with other third-party applications and better support SMBs process-wise.

Finally, the best-of-breed versus complete business suite debate is far from over.

First of all, if you're looking for a new CRM solution and you're happy with your current accounting system, you probably don't want to replace it; (if it ain't broke, don't fix it).

Most of the best-of-breed CRM solutions mentioned above offer pre-built modules that seamlessly integrate their offerings with the most widely used SMB accounting solutions.

In addition, Salesforce.com's AppExchange service and Netsuite's NetFlex program are just two of the more recent initiatives with the goal of offering SMBs the ability to select and easily implement a wide variety of pre-integrated, best-of-breed business applications.

As a result of these types of initiatives, the best-of-breed approach is beginning to make sense for SMBs who want to pick and choose the technology solutions they need (and want) rather then be stuck with a CRM solution that's bloated with all kinds of functionality they don't need.

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